Archives

Does the Fiscal Cliff Really Need to Be Stopped?

December 10, 2012John Olen

The “fiscal cliff” is a manufactured crisis created by Congress during a previous manufactured crisis (the debt ceiling debacle of 2011). The fiscal cliff was designed in such a way as to make it an unattractive option for both Democrats and Republicans. It includes unpopular tax hikes across the board, entitlement cuts opposed by Democrats, and defense cuts opposed by Republicans and many Democrats.

Now the president has to come to a deal with a Republican-controlled House of Representatives and a Senate controlled by Democrats. No one in our government wants the nation to go over the fiscal cliff, which is a compelling argument for why it would be beneficial. Congress and President Obama have shown themselves to be woefully inept at managing the budget and stimulating the economy. There are continual debates based in ideology instead of facts, and most of what our government does implement is a handout to special interests rather than effective policy for the whole country.

It is easy to look at the fiscal cliff and say it is unattractive. But what are the alternatives? A brokered deal that perhaps will raise taxes on a few Americans but will not fundamentally change the way our tax system works or pay down the debt in any significant way? A deal that makes hasty cuts to Medicare and Medicaid instead of reforming them to make them work? A politically safe deal that restores our bloated defense spending despite the fact that we can protect ourselves many times over on much less money?

Going over the fiscal cliff would be painful for sure. The psychological effect alone would likely hurt the economy. But the chances are greater that we will not get any real, meaningful reform if no deal is reached before the end of the year. Congress made a last minute deal to avert default during the debt ceiling debate. That deal has left us where we are today. What reason do we have to believe a last minute deal will be any better? Going over the fiscal cliff might spur real change, which would be the most meaningful and potentially productive thing Congress has done in decades.